BY JOE MARVILLI
At the Queens Tribune’s power breakfast forum Monday morning, Don Graves, the deputy assistant secretary for the Office of Small Business, Community Development and Housing at the Dept. of the Treasury, used his keynote speech to review where the nation’s economy had been, where it is now and where it may go in the future, particularly if there is a government shutdown in the next week.
In a one-on-one conversation with the Tribune, Graves outlined what President Barack Obama’s administration had done to help right the ship after the economy sank during the Great Recession of 2008, leading to slow, steady growth in the last couple of years.
Graves mentioned that since President Obama took office in 2009, there have been seven and a half million private sector jobs created over a 42-month period of employment growth. This increase is not rising fast enough for the administration however, leading to multiple proposals by the President to further jumpstart the economy. These proposals have hit a roadblock in Congress, he said.
“Congress has not been able to find a way to act on those proposals to invest in our schools, in our infrastructure, in our first responders, to invest in new technologies, to support greater investment in small businesses,” Graves said.
Looking back, Graves said the recession was the result of multiple bad decisions in the financial services industry, with many risky moves accompanying those choices.
“There wasn’t enough oversight in the system to make sure that type of activity didn’t get out of control,” he said.
Since 2008, the federal government has taken steps to make sure such a scenario could not be repeated, such as the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010. This legislation aimed to improve accountability and transparency in the financial system.
An effect of the Dodd-Frank Act was the creation of the Consumer Protection Financial Bureau, an independent federal agency responsible for regulating consumer protection for financial products and services.
Another piece of legislation Graves highlighted was the Small Business Jobs Act of 2010, which supports small businesses by raising the loan levels.
“It created the Small Business Lending Fund at the Treasury Dept., which provided $4 billion worth of investment in community banks, the very banks that do the lion’s share of lending to small businesses. That’s led to $9 billion of new small business lending above and beyond the levels that banks had been doing, at no cost to the taxpayer,” Graves said. “The banks are actually paying both the taxpayer back at rates higher than the original investment and they’re increasing their lending to small businesses.”
Despite the progress made with these acts, the federal government is approaching a possible government shutdown, due to conflicting ideologies between Republicans and Democrats on how to proceed with a national budget. Graves made it clear that a government shutdown should not be on the table at all.
“First off, we can’t go into a shutdown. We can’t be in a place as a country where we aren’t willing to live up to our obligations,” he said. “If we can’t find a way to raise the debt limit, it’ll have a huge impact on the financial markets. Our bond rating in the financial markets will likely take another hit like it did a couple of years ago.”
If the various government bodies cannot come to an agreement by Oct. 1 and the shutdown happens, Graves said the effects would impact the lives of everyday Americans.
“If you have millions of government workers not able to fill their functions and getting checks cut and the like, people will feel it very, very quickly,” he said.
Reach Joe Marvilli at (718) 357-7400, Ext. 125, email@example.com, or @Joey788.